Modes of condominium management: a principal‐agent perspective

Abstract

Purpose Condominium is a dominant form of home ownership in metropolitan areas within Asia. Yet managing and up‐keeping such homes poses a challenge to most condominium owners, with larger condominiums equipped with sophisticated facilities becoming increasingly popular. This paper attempts to develop a model, based on a principal‐agent theoretical perspective, which provides a conceptually vigorous representation of condominium management modes: owner‐management; direct labour and third party agent‐managed modes. Design/methodology/approach Parallel surveys were conducted in Taipei and Hong Kong to offer empirical evidence of the model. Findings From the logistic analysis which this paper conducts, it is argued that not only does the choice of management mode reflect the quest for better management service: the mediation effect of agency costs between the lay members of home owner organisations and their leadership, as well as issues between the owners and the professional management agents, is also significant. Originality/value Findings in this paper would help to enhance understanding of the practices used in condominium management and the factors that influence the choice of management mode.